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Taking On Big-Business Wage Theft

Memo Pad

Taking On Big-Business Wage Theft


Lawsuits show that the fight against wage theft is heating up, but workers shouldn’t have to sue their employers to get paid what they’re owed.

Despite the extensive press coverage of the fight of fast-food workers for a $15 hourly wage, one recent development hasn’t gotten much attention: fast-food workers around the country have started to win significant wage-theft lawsuits against McDonald’s franchisees, to the tune of hundreds of thousands of dollars. These lawsuits raise an important question: How has McDonald’s been able to get away with stealing hundreds of thousands of dollars from low-wage workers? The answer is straightforward. Our system for enforcement has been so severely weakened that many employers are able to regularly violate workers’ basic rights. And the law itself is broken. Its structure allows corporations like McDonald’s to escape responsibility for the conditions in their workplaces.

In February, student guest workers won a lawsuit that charged a McDonald’s franchise in Pennsylvania with wage theft. They had been paid sub-minimum wages, denied overtime pay and charged exorbitant prices for company housing. The Department of Labor required the franchise to pay $205,977 to both guest workers and native-born workers at the franchise. This victory was rapidly followed by a wave of other lawsuits around the country.

Last week, McDonald’s workers in three cities launched highly publicized cases charging the corporation with wage theft. These workers had experienced many types of wage theft. The workers in California claim that they were not paid for overtime work. In Michigan, workers are asserting that they were required to show up for work but were not allowed to clock in. Workers in New York allege that they were not compensated for the time they spent cleaning their uniforms, required to do work off the clock and not paid overtime. The New York suit was almost immediately successful. Last week, seven franchises agreed to settle for almost $500,000.

McDonald’s workers are not alone. Wage theft has become a widespread problem in low-wage industries in the United States. An influential study found that more than two-thirds (68 percent) of workers had experienced some form of wage theft in their previous week of work: They were paid below the minimum wage, not paid for overtime, required to work off the clock or had their breaks limited. An organization of fast-food workers in New York City surveyed workers and found that 84 percent of workers had experienced wage theft in the last year.

Addressing wage theft will take a two-pronged solution: rebuilding the enforcement system in the U.S., and cutting through the smokescreen of subcontracting and franchising to hold employers responsible for the wages and working conditions in their workplaces.

The enforcement regime in the United States has been significantly weakened over the last several decades. There has been an overall downward trend in funding for the Department of Labor. The number of labor inspectors had plummeted for years. The Obama administration has added new inspectors, but not enough to make up for the long-term decline. Meanwhile, the number of workers who need protection has grown. This pattern has to be turned on its head. If rampant wage theft is to be stopped, we need to radically increase the number of labor inspectors on the ground.



  1. jointerjohn April 3, 2014

    And yet all across the country there are workers whining about paying a few bucks in union dues so they can have some protection.

    1. Sand_Cat April 3, 2014

      I suspect many of the “workers” whining about paying union wages are working for GOP propaganda organizations and / or for the companies hired to fight unionization of other companies and break strikes.

  2. idamag April 3, 2014

    It has been easy for the powers to devaluate the workers so they think they are grateful for a job that pays them less than they are worth. If all the working people quit working for a week, we would feel it at the hospitals, police force, fire departments, the building industry and the sanitation people. Those are the people that make businesses rich. It is about time the working people realize they are the elite, not the takers. The takers not being those who get food stamps. The takers are the corporations who steal from their employees by paying them substandard wages. Every part of this nation has organizations to speak for them in Washington. Heaven forbid the working man doesn’t know his place and organizes to be heard.

  3. Allan Richardson April 3, 2014

    WalMart rules require workers starting their jobs to (1) already be wearing their employee-identifiying vests when they arrive, (2) use the front entrance the same as the customers, (3) walk through the store before clocking in at the back, (4) do NOT refuse service if customers ask for it, EVER, whether on the clock or not; and on leaving, to (1) clock out in the back, (2) leave their vests and badges on, (3) walk through the store, and (4) leave through the front door before removing their employee identification.

    Considering that many customers require 10 to 15 minutes, maybe more, of assistance before releasing the employee who is helping them, how many THOUSANDS OF HOURS of customer assistance per year are rendered “off the clock?” And this is no accident; the protocol was DESIGNED to make this happen. Otherwise, they would have an employee entrance in the rear!

  4. Canistercook April 3, 2014

    Cannot believe how negative some of these comments are. Seems like it is ‘the Union vs. Corporation. Trouble is success demands cooperation from both sides.

    1. charleo1 April 3, 2014

      Not to belittle your perception, but one’s political persuasion tends
      to also reflect what issues they are more aware of than others. It’s
      normal for the Conservative to be concerned with issues such as
      how to lower overhead costs, lessen regulations, or comply with
      regulations more efficiently. Or, how to minimize payroll costs, by
      maximizing employee output. Or lately, for the big box retailers,
      and fast food franchisers, that employ an ever growing percentage of the total workforce. What to tell your employees about how best to apply for the wide array of public assistance programs that are available for them and their children, at their current income level. Things like, they are best applied for on their days off, or when their shift starts after 5:00 P.M. Or another example is a policy WalMart instituted a few years back, regarding sick days. If you must be out of work for an illness, or that of your child, you must present a signed physician’s note upon returning to work. Failure to do so, will result in being charged with an unexcused absence. Two or more such unexcused absences will qualify as grounds for dismissal. Of course, during what WalMart calls it’s probationary period, no medical benefits are available,
      the first 2 years. That’s for full time employees. (Part timers are
      not covered, ever.) And since a doctor visit will cost entry level employees the equivalent of 1/4 of a month’s rent, or an extended wait at the community hospital’s emergency room. The good news is, this policy has cut absences, to facilitate our tightly controlled schedules, tremendously! The bad news for employees is, the kids often go to school sick as dogs. Ditto for their parents.
      The truth is America is no longer a Unions Vs. Corporations,
      Country. No formal cessation of hostilities has been signed of course. But, there is really no doubt as to the outcome. From a
      high in the 1950’s when a labor union represented about 37%
      of all private sector labor. Today, that number is less than 7%,
      and falling. So in the area of labor, a free market economy is practically dead. No longer is there even a semblance of equality between buyer, and seller, employer, and employee. The buyer holds most of the cards. And, with ripples of the supposedly bygone recession continuing to bolster the employer’s position. Plus, the combination of powerful lobbyists, and our money fueled politics, the prospects of that hand improving even more, is all but a foregone conclusion. As Travis Trett once sang. “Lord have
      mercy on the working man.” (And woman.)

    2. Sand_Cat April 3, 2014

      The last five years have proven how well trying to cooperate with someone who won’t works.

  5. 4sanity4all April 6, 2014

    This wage stealing happened to me as a youngster in the 60’s,working my first job. I quit when I realized that I was working for less than 50 cents an hour. I thought the law protected workers against that, but sadly, it is even worse now. We need laws AND enforcement.


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